6.1b ERMUSR 06-11-2019-,1
�1
Elk River
Municipal Utilities
TO:
ERMU Commission
MEETING DATE:
June 11, 2019
SUBJECT:
Staff Update
ACTION REQUESTED:
None
UTILITIES COMMISSION MEETING
FROM:
Theresa Slominski — Finance & Office Manager
AGENDA ITEM NUMBER:
6.1b
DISCUSSION:
• As mentioned last month I will not be at the commission meeting. Please send any questions on
the financials by Monday 2:00 P.M. so I can have responses ready for everyone at the meeting.
• The bill presentation changes are complete and are effective with bills being mailed out this
month. The presentation changes are a revision to better segregate City from ERMU services,
and also allows for a slight change to the color scheme and the pictorials (moving from graphs to
snapshot information).
• Summer schedules for the City are in place now through Labor Day, where the offices are closed
at noon on Friday. We do not close our office but do have reduced staff on Friday afternoons,
as employees alternate taking Friday afternoons off throughout the summer.
• We received our property and liability insurance renewal for 7/01/2019 to 7/01/2020. The total
premium increase is approximately 11% over the prior year; $132,642 compared to $119,629,
with total insurable values increased from $59,603,298 last year to $62,005,094 this year. A
breakdown of the premium increase is below.
o The Property premium increased by about 12.5%. The largest component of this
increase was an error in calculation the prior year for Equipment Breakdown, where we
should have been charged approximately $7,000 more than we were. This makes it
appear to be an increase in premium this year, however, that is not the case.
o The Liability premium increased by about 3%, mostly due to our expenditure growth
over the years.
o The Auto premium increased by about 15% and is a result of the change in risk
calculation that no longer includes auto liability loss experience. We had a pretty good
Experience Factor Modifier so removing that increased the premium for us.
ATTACHMENTS:
• 2019-2020 Renewal Premium Summary
Page 1 of 1
ELK RIVER MUNICIPAL UTILITIES
RENEWAL PREMIUM SUMMARY
07/01/2019 TO 07/01/2020
COVERAGES ,F PREMIUMS PREMIUMS
2019 - 202o F-2ols - 2019
Property(2) - _ - --- r _ $ 32,981_ $ 30,425
Mobile Property s $ 1,402 j $ 1,318
Equipment Breakdown (1) $ 66,630 j� $ 57,954
Crime_ Included '- Included -
Crime
Faithful Performance Bond $` 640 $ 640
Municipal Liability (3) y j $ 23,840� $ 23,141 !
Automobile Liability (4) $ 3,601 F $ 2,708
Automobile Physical Damage f _ $ 3,548 ! $ 3,443
Open Meeting Law _ ! ; Included ;� Included j
j Petro - Fund Included Included _
Fireworks Not Covered Not Covered
No Fault Sewer Back Up Not Covered r— Not Covered
TOTAL PROPERTY/CASUALTY PACKAGE _ $ 132,642 $ 119,629
Liquor Liability !®� Not Covered j _ Y Not Covered
Excess liability Not Covered I Not Covered
TOTAL P/C PREMIUM $ 132,642 F $ 119,629
NOTES:
1. Equipment Breakdown coverage increased premium Underwriter explanation: "There was an
error in our calculation last year that led to us undercharging by quite a bit for the equipment
breakdown coverage. Last year, the charge should've been up around $64,000 or so. It looks like
a jump in premium but really the member simply got a deal last year due to our error."
2. The total insurable values increased from $59,603,298 last year to $62,005,094 this year (LMCIT
Replacement Cost Inflation Factor).
3. The Liability premium increased by about 3%, as the rating expenditures increased from last
year. Your Municipal Liability Experience Factor Modifier is 0.877 (13.2% credit)
4. The Auto premium increased about 15%. The Municipal Liability Experience Factor Modifier no
longer includes the Auto liability loss experience, as the Auto liability premium previously was
surcharged for non -auto liability claims like Land Use and Employment Practices loss costs.
67